Jumping the Gun on Woolworths
Woolworths’ share price has been on a tear the last two months, up 21%. And last week, Mr Market got particularly excited about a little sentence in its 2016 financial report. Tucked away on page 77 of 101 it reads “Comparable sales for the eight weeks ended 21 August 2016 increased by 0.3%.” Have sales declines come to an end? Has Woolworths has turned the corner? One only needs to look at its competitors to remain concerned. After two years of lowering prices by just over 1% annually, in the final quarter of 2015/16 Coles dropped prices at an annualised rate of 2.4%. And then there’s Aldi, the low price leader who is rapidly gaining share of the Australian consumer’s supermarket dollar. So while Woolworths outlined a few small positives at its annual result last week, price competition is heating up and this won’t bode well for its profitability. Read the full blog post: (VIEW LINK)
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Daniel joined Forager in April 2016 as a senior analyst / portfolio manager for the Australian Fund. He is an avid value investor having previously worked at Investors Mutual and MMC Asset Management. He has a Bachelor of Commerce degree...
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